SEC Revises Enforcement Playbook for the First Time in Eight Years

This week, the SEC’s Division of Enforcement announced significant updates to its Enforcement Manual — the internal staff reference that governs how the Division investigates potential securities law violations. Many of the changes appear designed to improve efficiency and transparency, a welcome and long-awaited change. These are the first revisions to the Manual since 2017.

The agency’s press release flags three main areas of change:

• A more uniform Wells process. Wells notice recipients now generally get four weeks to submit their responses. The Manual expressly provides that the Staff “may determine not to grant a request for an extension of time for good cause, including but not limited to the bases for and/or the length of the extension requested.” After filing, Wells recipients are also now entitled to a meeting with a member of senior Division leadership — also within four weeks. In her first major remarks as the SEC’s Director of Enforcement a couple of weeks ago, Enforcement Director Judge Margaret "Meg" Ryan signaled a view, echoed in the revised Manual, that the Wells process should facilitate “open, informed, and thoughtful dialogue,” and emphasized that “a compelling Wells submission can and may make a difference” both at the staff recommendation stage and when the Commission votes on an enforcement recommendation. 

• Simultaneous settlement and waiver consideration. The Manual codifies a policy shift that Chairman Atkins previously announced in September 2025, when he, in consultation with the Divisions of Enforcement, Corporation Finance, and Investment Management, restored “the Commission’s prior practice of permitting a settling entity to request that the Commission simultaneously consider an offer of settlement that addresses both an underlying Commission enforcement action and any related waiver request.” In short, targets can now see the full cost of a deal — including any automatic disqualifications — before they sign. 

• Updated cooperation and referral frameworks. The Manual details how cooperation will be evaluated— including its impact on civil penalties — and updates the framework for referrals to criminal authorities.

Additional Reforms Designed to Create Efficiency 

Beyond these headline changes, the Manual includes additional reforms designed to push down decision-making and enhance the speed of investigations and resolutions:

• Priority-setting goes local. The Director-driven “National Priority Matters” system is gone, replaced by a “Top 5” priority list that each Associate Director and Unit Chief now maintains on their own docket. Whether such decentralization will somehow produce more consistency — a seemingly illogical outcome the SEC highlighted in its announcement — is an open question.

• A new coordination requirement. The Manual adds a concrete mechanism to ensure that the SEC’s resources are deployed efficiently — a theme Ryan highlighted in her recent speech. Before opening a Matter Under Inquiry, staff must now check for any open examinations of potentially involved entities. It’s a formal requirement that enforcement and examination aren’t running parallel tracks on the same target without knowing it.

• Unit names have changed. The Municipal Securities and Public Pension Unit is now officially the Public Finance Abuse Unit. The Cyber and Emerging Technologies Unit has replaced the most reviled Crypto Unit. The Foreign Corrupt Practices Unit has disappeared. These renamings and restructurings, which began under Acting Chairman Uyeda, are consistent with Chairman Atkins’ and Ryan’s stated focus on fraud schemes that harm retail investors and undermine market integrity, and with the Trump Administration’s recent de-emphasis of FCPA cases.

• Opening the investigative file. Although the 2017 Manual gave staff discretion to let a Wells recipient review non-privileged portions of the investigative file, the revised Manual provides that staff “should be forthcoming about the content of the investigative file,” and requires staff to make “reasonable efforts” to provide access. There are certain explicit carve-outs — including privileged material, whistleblower information, and BSA material — but the default has shifted from permissive to affirmative. And a fourth consideration has been added to the existing three-part balancing test for providing access: whether doing so would allow the recipient to “respond meaningfully” to the staff’s proposed recommendation. This is a significant due process upgrade. A Wells recipient who gets key documents — and especially transcripts — before submitting is in a fundamentally different position than one writing blind. And the change creates conditions for earlier settlement: defense counsel who can actually see the record are better placed to assess their clients’ exposure and advise accordingly.

• Tolling agreements get a tighter leash. The Manual caps the authority of Associate Directors to approve tolling agreements at 90 days, with any extension beyond that requiring sign-off from the Division Director or a Deputy. This restriction, too, fits the pattern: the Division is trying to put guardrails on how long investigations can drag on, and to push accountability for delays up the management chain. 

The Bottom Line: Driving Faster Resolutions 

At bottom, the Wells reforms — and the simultaneous settlement and waiver consideration — represent a concerted effort to drive faster resolutions short of litigation. The theory is straightforward: give respondents more information, more time, and a guaranteed seat at the table with senior leadership, and more cases will resolve before the Commission votes on an enforcement recommendation.

Whether it works will depend on execution. If the staff actually provides meaningful discovery — including transcripts — and if respondents are provided a prompt meeting with the Director or other senior Division of Enforcement personnel with decision-making authority, the conditions for earlier, and perhaps more just, resolution are at least plausible. The waiver change reinforces this: respondents who can see the full cost of a settlement up front are better positioned to make a deal.

But Ryan was clear in her recent address that fairness cuts both ways. Respondents get four weeks — not five. And the defense bar was put on notice that tactical delay will be “met by steadfast commitment to reasonable and timely resolution.” The Manual has standardized the process. The clock is now running for everyone.